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EDEXCEL FUNDING NETWORK. Adult Funding – Policy Update Mark Corney, MC Consultancy. 25th JULY 2006. INTRODUCTION. Current and Future Policy Current Adult Learning & Skills Policy Policy Context New Developments Things to Look Out For. 25th JULY 2006. CURRENT AND FUTURE POLICY.

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Edexcel funding network

EDEXCEL FUNDING NETWORK

Adult Funding – Policy Update

Mark Corney, MC Consultancy

25th JULY 2006


Introduction

INTRODUCTION

  • Current and Future Policy

  • Current Adult Learning & Skills Policy

  • Policy Context

  • New Developments

  • Things to Look Out For

25th JULY 2006


Current and future policy

CURRENT AND FUTURE POLICY

  • current policies

    including the FE white paper but excluding legislative change

  • new policies before the next general election

    including FE white paper legislation

    welfare to work bill

    Communities and Local Government white paper

    Queen’s Speech – Learning & Skills Bill

    Pre-Budget Report 2006 – Leitch Review

    Budget 2007

    Comprehensive Spending Review 2007

25th JULY 2006


Current adult learning skills policy

CURRENT ADULT LEARNING & SKILLS POLICY

  • 19+ Provision

  • 19-25 Provision

  • 25+ Adult Learning & Skills

25th JULY 2006


Edexcel funding network

Levels of Revenue Spending – State: 16-19 (England)

2006/07m 2007/08m

Tuition/Training

School Sixth Forms 1,871 1,910

16-19 FE 2,863 3,026

16-18 WBL 877 879

Total £5,611 £5,815

Financial Support

Child Benefit 1,100? 1,100?

Child Tax Credit ? ?

EMAs 566 597

Learner Support etc 76 79

Total £1,742 £1,776

TOTAL £7,353m £7,591m

MC Consultancy


Edexcel funding network

Revenue Spending - State Higher Education (England)

2006/07m 2007/08m

Higher Education

Tuition

HEFCE & TTA 4,817 5,039

Fee Loan (cash) 423 1,050

Total 5,240 6,089

Learner Support

ICLs (cash) 2,867 3,000

Grants 937 1,031

Total 3,804 4,031

Total £9,044 £10,120

MC Consultancy


Edexcel funding network

Levels of Revenue Spending: State - Adult LSC Provision

Tuition/Training 2005/06 2006/07 2007/08

19+ FE 2,009 1,928 1,894 (includes 19-25)

19+ WBL 269 202 229

PCDL 210 215 215

NETP 161 269 448 (excludes skills brokers)

UfI 201 176 175

Prisons 98? 125?

Disabilities 138 157 181

ULF 12 12 12

WtW Adult Basic Skills/ESOL 23? 23?

Total 3,000 3,080 3,302

Learner Support

Adults 127 133 133

Wage Compensation 19 19

Total 127 152 152

TOTAL £3,127 £3,232 £3,454

MC Consultancy


Edexcel funding network

Levels of Revenue Spending: Other Public Sources

European Social Fund up to £1bn

New Deals and Pathways to Work no estimate

£30m FTET Option in NDYP

Regeneration New Deal for Communities

£20m


Current adult learning skills policy1

CURRENT ADULT LEARNING & SKILLS POLICY

By Age 25 up to first Level 3

-Individuals

Free Provision for: Foundation Tier Learning Entitlement

First Full L2 Entitlement - 19+ FE/Train to Gain/19-24 WBL

First Full Level 3 - 19+ FE/Train to Gain/19-24 WBL

Financial support to adults takes the form of grants

  • Employers

    Free Provision for: adult basic skills & first full L2 via 19+ FE/Train to Gain

    but not 19-24 Apprenticeships

    Fees for: first full Level 3 Apprenticeships and NVQ3 via Train to Gain

    Employers pay wages for sponsored 19-25 FE & employed 19-25 WBL learners

    but paid wage compensation under Train to Gain at first L2 if in small firms

25th JULY 2006


Current adult learning skills policy2

CURRENT ADULT LEARNING & SKILLS POLICY

By Age 25 up to first Level 3

  • 19-24 Spending up to L3

    Less than £0.9bn in 2007/0819-24WBL £229m (07/08)

    19-24 FE £511m? (04/05)

    19-24 Train to Gain ?

  • 19-24 Spending on L3

    Very limited in 2004/05 19-24FE ?

    19-24 WBL £140m?

25th JULY 2006


Current adult learning skills policy3

CURRENT ADULT LEARNING & SKILLS POLICY

25+ Adult Learning & Skills

-Individuals

Free Provision for: First Full L2 Entitlement - 25+ FE & Train to Gain

50% Fees by 2010: Above first full L2 including L3

Limited Financial Support

  • Employers

    Free Provision for adult basic skills & first full L2 via 25+ FE & Train to Gain

    50% Fees for first full L3

    wage compensation in certain circumstances at first full L2 via Train to Gain

25th JULY 2006


Current adult learning skills policy4

CURRENT ADULT LEARNING & SKILLS POLICY

25+ Adult Learning & Skills

  • 25+ up to Level 3

    estimated to be £2.4bn in 2007/08

    very limited funding on 25+ L3 provision: 19+ FE 2004/05 £418m

25th JULY 2006


Policy context

POLICY CONTEXT

  • Public Spending Constraints

    -42% of GDP and rising

  • Demographic Change

    -falling numbers of 0-24 year olds between 2011 and 2021

    -ageing society from now

  • Demographic Dividend for State Education & Training

    -assume funding is retained in education and training sector

25th JULY 2006


Policy context1

POLICY CONTEXT

Priorities for the Demographic Dividend

-Edu-Care

-14-19 Reform – including closing the 16-18 funding gap

-19-25 Foundation Tier Entitlement

-19-25 First Full L3 Entitlement [46% of 20-24 year olds not have L3+]

-19-25 ALGs for first L3

-Closing Gap between State & Private Schools [Budget Speech 2006]

25th JULY 2006


Policy context2

POLICY CONTEXT

  • Priorities for the Demographic Dividend

    -Savings in tuition and support costs from 2011 to 2021

    0-24 up to first Level 3

    18-20 in HE which is the largest cohort of 18-30 year olds

    But unlikely to be any savings in HE:

    - 42% baseline for 18-30

    - fee loans keep it around 42%

    - might miss 2010 target

    - savings used to get from 42% to 50%

25th JULY 2006


Policy context3

POLICY CONTEXT

  • Pinch Points

    Limited public resources for:

    -17+ HE above 50% target

    - 25+ Adult skills (+0.5m 25/64 by 2021) above first full Level 2

    Co-Funding in HE and 25+ Adult Skills

    -New Fee Loans from 2006

    -FE White Paper

    Long-Term Direction

    -Leitch Review

    -2009 HE Funding Review

25th JULY 2006


Policy context4

POLICY CONTEXT

  • Pinch Points

    Higher Education Funding2007/08

    HEFCE & TTA 5,039

    Fee Loans (cash) 1,050

    Maintenance Loans (cash) 3,000

    Grants 1,031

    Total £10,120m

    25+ Adult Skills 2007/08

    LSC £2.4bn

    ESF?

    JCP?

    Total £2.4bn+

25th JULY 2006


Policy context5

POLICY CONTEXT

  • Co-Funding Constraints

    -National Pension Saving Scheme (2012)

    4% from employees with an opt-out

    3% from employers without an opt-out

    1% from the taxpayer

    -900,000 private sector firms which are mainly small firms

    -£2.6bn from employers and £2.6bn+ from employees

25th JULY 2006


Policy context6

POLICY CONTEXT

  • Statutory Intervention Constraints

    -Funding

    National Pension Savings Scheme – Soft Employee Compulsion

    Hard Employer Compulsion

    -Regulation

    NPSS collection systems

    work-life balance

25th JULY 2006


Policy context7

POLICY CONTEXT

  • Institutional Landscape

    It’s messy even in England………….

25th JULY 2006


Context

CONTEXT

  • Institutional Constraints

    It’s a mess………….

NORTH EAST REGION LSC – MATFEN HALL – 10/11 JULY 2006


New developments

NEW DEVELOPMENTS

  • Learning after the 14-19 Phase

    -Higher Education

    Gordon Brown – Centre for European Reform

    Alan Johnson – IoD Speech – 14th June 2006

    “If we want to massively expand universities – and we do – then people must make a greater contribution. This is a sensitive issue but we must press on in the direction we have set.”

25th JULY 2006


New developments1

NEW DEVELOPMENTS

  • Learning after the 14-19 Phase

    -Financial Incentives

    Alan Johnson – IoD Speech – 14th June 2006

    “On one side, we should look at whether there are new incentives we can put in place to improve business and personal investment.”

25th JULY 2006


New developments2

NEW DEVELOPMENTS

  • Learning after the 14-19 Phase

    -Statutory Intervention

    “On the other, we should look at those sectors which consistently fail

    to address long term training needs and consider radical action to

    help them raise their game. This must include examining options such as imposing training levies licences to practice, if necessary, in a particular sector.”

25th JULY 2006


Context1

CONTEXT

  • Institutional Constraints

    It’s messy even in England………….

NORTH EAST REGION LSC – MATFEN HALL – 10/11 JULY 2006


New developments3

NEW DEVELOPMENTS

  • Learning after the 14-19 Phase

    -London Mayor

    19+ Adult Skills

    new London Skills and Employment Board chaired London Mayor

    Board to link training and employment

    Board to work within the national skills strategy framework

    Statutory Annual Adult Skills Plan

    19+ Adult LSC Funding in London separately identified

    Statutory Adult Skills Plan shape the way the LSC allocates funds

    Existing LSC Regional Board will remain for 14-19

25th JULY 2006


Things to look out for

THINGS TO LOOK OUT FOR

1LSC Powers over Colleges

-managing failing colleges

-replacing college principals

  • Managing Contestability

    -colleges as 16-19 academies

    -private providers contesting the 19+ FE budget

    -skills brokers

  • Internal Reform of the LSC

    -formal abolition of the 47 local councils?

25th JULY 2006


Things to look out for1

THINGS TO LOOK OUT FOR

425+ Adult Skills

-this is the neglected child of the publicly funded system

-compare 25+ Adult Skills with 17+ HE

-priority provision for 16-19/25 funding

-re-engineering 25+ funding to first Level 2 entitlement

-re-engineering 25+ FE funding to first Level 3

-balance between 25+ FE and Train to Gain

-balance between: customer demand - employers and adults

aggregate demand - employers and areas

employer demand - SSAs and RSPs

-giving SSAs more bite – statutory SSAs?

25th JULY 2006


Things to look out for2

THINGS TO LOOK OUT FOR

5City-Regions, Fair Cities and Local Authorities

-RDAs - Statutory Regional Skills Partnerships

-City Mayors and Local Government

Local Area Agreements – Block 4

pooling of LSC, JCP, Local Authority and RDA monies

where is this leading…

Communities and Local Government white paper

6 Welfare to Work

-LSC/JCP interface in England

-JCP programme money passed to LSC and vice-versa

-where is this leading……

-Leitch Review

25th JULY 2006


Things to look out for3

THINGS TO LOOK OUT FOR

7New Financial Incentives

-Leitch Review

-CSR 2007 Summary

-Budget 2007 and CSR 2007

8 Statutory Intervention

-statutory training levies and statutory licenses to practice

9Learning and Skills Bill (2007)?

-LSC powers over colleges?

-legal definition of colleges and private providers?

-abolition of the 47 local councils?

-statutory RSPs & statutory sector skills agreements?

-extension of income contingent loans outside HE?

-powers and process to impose statutory framework?

25th JULY 2006


Things to look out for4

THINGS TO LOOK OUT FOR

10Longer Term Issues and Options

-local authorities as the single commissioners of 0-25

children’s and learning services?

-regionally merged 25+ LSC/Jobcentre Plus/RDA?

-2009 HE Funding Review?

-balance between Level 3 and HE is meeting our

higher skill needs?

-25+ adult skills and the ageing society?

-balance between publicly and privately funded 25+

adult skills, and voluntary and statutory funding?

-strengthening the system of business links and sector

skills councils in England?

25th JULY 2006


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